Yesterday I met up with Paul Thorley, Chief Executive Officer of Capgemini Australia and New Zealand, the local subsidiary of Capgemini Group, one of the world's largest technology, consulting and outsourcing services companies.

We discussed Paul's thoughts on responsible leadership and Paul explained that he believes responsible leadership has a lot to do with sustainability in its broader definition, that is not just about being green.

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Responsible leadership is also about creating a legacy. Responsible leadership leaves behind something stronger and better, with staff, shareholders and customers.

As leaders we wrestle with this sequencing of different sectors to create a sustainable environment.

"From my perspective, I like to create an environment around me where people can be successful," Paul explained. "My main role is multifaceted as I help create an environment that is empowering people to achieve success across the organisation."

Working with the operational leaders across our 1,000 staff we support and mentor them so they can in turn support and mentor their teams. As staff are all empowered in this environment - they are also encouraged to take informed risks and approach projects with fire in their belly.

Taking informed risks / chances / bets with people is an important aspect of a responsible leader who is to help them develop. Judge them on values and thereby a value foundation is created.

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All staff are assessed across the 7 values that have been with Capgemini Group from their founder since inception.

·         honesty

·         boldness

·         trust

·         freedom

·         team spirit

·         modesty

·         fun

Encouraging informed risk taking, boldness if you will, then provides them confidence in the market to shake up the competition and be more competitive.

One example of taking risks with people is to promote them a little earlier than they are necessarily ready for. As they are receiving new responsibilities they in turn need to step up and develop into the new role. This is an important aspect of being responsible in your leadership.

Even through the Group’s 40+ acquisitions these values in supporting people and encouraging responsibility, development and risk taking continue and remain highly important.

Paul then explained what he sees as the attributes of a responsible leader.

As an individual we develop our core values from our family and other sources. From my father I learnt the importance of fairness.  When you walk into an organisation their corporate values become literal to you, though you also bring your own values to the role. These values then provide the framework through difficult issues.

Those who build a sustainable business through an ethical code use ethics at the core of everything they do.

In another dimension, those who genuinely are caring about the people around them, and don't see them as widgets or assets, know this people dimension is incredibly important to successful leadership.

Through a focus on values and helping people be successful you are working with the core attributes of a responsible leader.

Recently I had the opportunity to meet with Peter Church, Founder and Chairman of AFG Venture Group and author of Added Value - The life Stories of Indian Business Leaders.

Mr. Uday Kotak, B.Com, MMS (Masters in Management Studies), aged 50 years, is the Executive Vice-Chairman and Managing Director of the Bank, and its principal founder and promoter. Mr. Kotak is an alumnus of Jamnalal Bajaj Institute of Management Studies.

In 1985, when he was still in his early twenties, Mr Kotak thought of setting up a bank when private Indian banks were not even seen in the game.

Harsh Mariwala
Marico

Harsh C. Mariwala leads Marico Limited (Marico) as its Chairman and Managing Director

Over the last 3 decades, Harsh Mariwala has transformed a traditional commodity driven business into a leading Consumer Products & Services Company, in the Beauty and Wellness space

Subash Menon
Subex 

Subash Menon founded Subex in 1992 and has been its CEO since inception. Under his stewardship, Subex has transformed from a Systems Integrator in the telecom hardware space to a leader in the telecom software space with a niche focus in revenue maximization. Subash charted Subex's growth from its humble origins as a one-man company to a global thought leader in the telecom software space

NR Narayana Murthy
Infosys 

N. R. Narayana Murthy is the Founder-Chairman of Infosys Technologies Limited, a global software consulting company headquartered in Bangalore, India. He founded Infosys in 1981. 

Mr. Murthy articulated, designed and implemented the Global Delivery Model which has become the foundation for the huge success in IT services outsourcing from India. He has lead key corporate governance initiatives in India. He is an IT advisor to several Asian countries.

Captain CP Krishnan Nair
The Leela Palaces, Hotels and Resorts 

Capt. Nair (Chairman) pioneered the export of fabrics to the USA in the late 1950s with the “Bleeding Madras” fabric. He was the first in the organized sector to set up a unit to produce cotton laces in India with Scottish Collaboration in Leela Scottish Lace Private Limited. He was also instrumental in organizing the “Small Exporters’ Guild” which helped many small exporters. He promoted The Leela Kempinski Mumbai in 1986, The Leela Kempinski Goa in 1990 and The Leela Palace Kempinski Bangalore in 2001.

Deepak Parekh
HDFC

Deepak Parekh stepped down as chairman of Housing Development Finance Corporation (HDFC) Limited, an Indian company providing home loans. A chartered accountant by profession, he started his career with Ernst and Ernst Management Consultancy Services in New York. 

Deepak Puri
Moser Baer India

AVS Raju
Nagarjuna Construction Company 

Arun Bharat Ram
SRF

Mr Arun Bharat Ram, Chairman of SRF Limited is an alumnus of the University of Michigan, U.S.A. He set up SRF in 1970 as a manufacturer of nylon tyre cord, which over the years has not only diversified but has also acquired global leadership in most of its businesses. His strong support of initiatives of corporate governance, Total Quality Management and professionalisation of management led to SRF’s Industrial Synthetics Business winning the coveted global Deming Award in 2004.  

CK Ranganathan
CavinKare 

C K Ranganathan, chairman and managing director of CavinKare, has shown the world it is possible to beat the multinationals even in the most difficult market of fast moving consumer goods.

GM Rao
GMR Group 

A visionary businessman, G M Rao recognised the huge business potential in entering the infrastructure space, with the opening up of the power sector in the 90s in India. Under his guidance, the Group is now developing several power projects in various parts of India & abroad and is also expanding its presence globally. 

Dr K Ravindranath
Global Hospitals

Global Hospitals was founded by Dr. K. Ravindranath, an internationally renowned Surgical Gastroenterologist and his associates in Hyderabad in 1998. Though Dr. Ravindranath had to wait a while for the passage of the Human Organs Transplantation Act before he could design and build Global Hospitals, it soon became a synonym for outstanding and compassionate health care.

Dr Anji Reddy
Dr Reddy's Laboratories

Under Dr. Anji Reddy’s leadership, Dr. Reddy’s has become a pioneer and a trendsetter in the Indian Pharmaceutical industry. It turned the Indian bulk drug industry from import-dependent in the mid-80s to self-reliant in the mid-90s and, finally, into the export-oriented industry that it is today. Dr. Reddy’s was the first company to begin drug discovery research in India in 1993 and has led the industry in turning from ‘copycats’ into innovators. 

GVK Reddy
GVK Group

GVK is a diversified business house. With a predominant focus on infrastructure - power, roads and urban infrastructure. The Company also have a significant position in services and manufacturing.

Kiran Mazumdar Shaw
Biocon 

A successful technocrat of global standing, Ms. Shaw heads India’s leading Biotechnology enterprise, Biocon. She is highly respected in the corporate world and was recently named among TIME magazine’s 100 most influential people in the world. Her pioneering efforts in biotechnology have drawn global recognition both for Indian Industry and Biocon.

Shashi Kiran Shetty
Allcargo Global Logistics

In 1982 Mr Shetty set up TransIndia Freight Services to cater to liner shipping services.

He has served as ex-trustee of Mumbai Port Trust and as the Vice-Chairman of the Association of Multimodal Transport Operators of India (AMTOI). Mr. Shetty has been appointed as the Chairman & Managing Director since the inception of the Company.

Vijaypat Singhania
Raymond 

When Dr. Vijaypat Singhania took over the reins of the company in 1980, he injected fresh vigour into Raymond, transforming it into a modern, industrial conglomerate.

Vijaypat is famous for his 'Hot Air Travels' A keen aviator, Singhania holds the world record for highest altitude gained travelling in a hot air balloon, notably carried out at the age of 67^[1].

Professor MS Swaminathan
The MS Swaminathan Research Foundation 

Professor M S Swaminathan has been acclaimed by the TIME magazine as one of the twenty most influential Asians of the 20th century and one of the only three from India, the other two being Mahatma Gandhi and Rabindranath Tagore. He has been described by the United Nations Environment Programme as “the Father of Economic Ecology” and by Javier Perez de Cuellar, Secretary General of the United Nations, as “a living legend who will go into the annals of history as a world scientist of rare distinction”. He was Chairman of the UN Science Advisory Committee set up in 1980 to take follow-up action on the Vienna Plan of Action. 

Added Value - The Life Stories of Indian Business Leaders

by Peter Church

This inspirational book combines invaluable advice with remarkable and candid inside stories of thirty Indian business leaders. Uncompromising vision, a willingness to take risks and exceptional business acumen enabled these leaders to add value to the business fabric of India.

Through a series of interviews Peter Church details the paths they travelled, the obstacles they overcame and the important lessons they learnt along the way. Not only do these stories provide guidance to young entrepreneurs trying to decide whether and how to embark upon a business career, but they also provide valuable insights to those looking for tie-ups and investment in India.

Enlightening and fascinating, Added Value celebrates larger-than-life ambition, inspired leadership, hard work and the twists and turns of fate.

You can purchase 'Added Value' here

Another directors report by Grant Crossley

Adaptive Leadership and the Need for Reflection

Several months ago Australia acquired a new Prime Minister.

This was an extraordinary and unusual event for a first term government to depose an existing leader and elect a new one. The consistent reasons reported for this change of leader were the themes of a breakdown and a lack of confidence in leadership. The failure in leadership was not about any paucity of intelligence, or a deficiency in qualifications, or any immoral intentions, or an insufficient understanding of the challenges that needed to be dealt with. What was in limited supply were skills such as the ability to consult and listen; the willingness to seek and value broadly based experienced counsel; the capability to delegate and trust others; the aptitude to build a high performing team and the facility to create enough consensus to ensure that others were taken on a journey of change. There was no evidence of any reflective processes or incorporation of feedback mechanisms.

I have been reflecting that one of our often innate and immediate leadership responses in a time of crisis or uncertainty or chaos is to try to concentrate power rather than devolve it. This is because our natural human response is to try to control and command the situation when we are dealing with complexity, a high degree of uncertainty and challenging environments. What we should be doing instead is having high visibility, devolving issues to the experts in our team and making ourselves the ‘glue’ that holds it all together that allows the best choices and decisions to be made.

We can all learn from Kevin Rudd’s experiences and consider how we could become better leaders and what is that we need to personally do to develop and hone our leading skills. Wise leadership requires we expand our abilities to:

• act with courage,

• create, develop and use a team that is high performing that plays to individual strengths,

• strengthen our individual character based skills – integrity, positive influencing, communication abilities, wisdom capacity

• increase our communication abilities, and

• improve our processes of listening, reviewing, modifying, valuing feedback and executing.

When times are tough, the issues complex and the pressure feels relentless, it is important that we pay deep attention and part of this requires that we give ourselves time to reflect. One of the recurring themes that are highlighted about Kevin Rudd’s leadership was that he slept very little and didn’t have any personal space or time to consider the broader implications of what was unfolding.

Recently I did a course which examined key concepts held by the ancient Greek philosophers (including Socrates, Plato and other different schools of thought). One of the most interesting insights I had was no matter what the philosophical underpinnings, the ancients emphasized that to create and foster wisdom requires daily ‘spiritual’ exercises that build fitness.

The ancients saw that as fitness and daily exercises were required for the physical, they were also required for the ‘spiritual’. Spiritual exercises were not based in a religion or an ideology but were practices of reflecting, meditating, contemplating individual life impermanence, reading of texts, writing and engaging in robust discourse. All of this with the aim to facilitate the individual to interrogate reality, where appropriate challenge the status quo, question their own and group beliefs, thinking and motivations and act with wisdom.

The Ancient Greek view of spirituality was that individuals must embrace their own humanity so that they could be the most fully human, alive, aware, and wise, living in harmony with others to their fullest capability.

One of the best passages on the rationale for daily spiritual exercises quoted in book “Philosophy as a Way of Life” came from George Friedmann, who in 1942 wrote: “Take flight each day! At least for a moment, however brief, as long as it is intense. Every day a ‘spiritual exercise’, alone or in the company of a man who wishes to better himself….Leave ordinary time behind.

Make an effort to rid yourself of your own passions…. Become eternal by surpassing yourself. This inner effort is necessary, this ambition, just. Many are those who are entirely absorbed in militant politics, in the preparation for the social revolution. Rare, very rare, are those who, in order to prepare for the revolution, wish to become worthy of it’.

Here is a list of potential activities that can be used to create and build your menu of exercises to provide a means to reflect and assist our personal leadership journeys:

• Writing, journaling

• Relaxation, meditation and breath exercises

• Imaginative and mindfulness exercises

• Music – listening, chanting, playing instruments, singing

• Story making/telling

• Nature – connecting to nature through solitude, walking, reverence and living/being in nature • Painting, drawing, collage, image making – giving an opportunity for subconscious images to come forth

• Art making in any medium or any form that we are drawn to

• Poetry – reading, writing, reciting

• Dream work – activating and working with dream images and stories

• Sacred/Ancient texts – working with them in a deeply in ways outlined in this letter

• Movement of the body – yoga, dance, walking or any physical exercise which facilitates and allows you to feel an expansion of connection

• Intentions, Prayer and Blessings – not a necessarily a religious view of prayer, but one that suits you i.e. labyrinth walking, personal ritual, showing gratitude and creating intentions In my view adaptive and wise leadership requires a daily willingness and ability to broaden and deepen inner capacity and capability.

Such capacity and capability (foundation or platform building) allows and facilitates wise holding (internally and externally) of conflict, confusion, uncertainty, fear, opposing views/ideologies/forces, chaos and complexity so that the wisest path can be navigated which will allow the best resolution or an elegant solution to be created. The benefit for such discipline and attention accrues to us as individuals as well as our organizations.

Lindley Edwards July 2010

About the author: Lindley Edwards is the Group Managing Director of AFG Venture Group (www.afgventuregroup.com) and its various subsidiaries. The Group undertakes corporate advisory work which involves merger, acquisition, divestments, strategic consulting, fund raising and licensing for its client base of public and private companies based in Australia and in Asia. AFG Venture Group has a full or representative office in nearly every Asean country. In addition AFG Venture Group also has a joint venture with Gemini Carbon, the UK carbon trading company.

Learn more about Responsibility and Responsible Leadership and The Responsible Leadership Global Road Map project at www.TotalExec.com.au

The 1st Responsible Leadership Newsletter has been released - view it here:

http://eepurl.com/Vq4o

This is an interesting vodcast about the importance of social innovation in leadership for executives...

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That's the insight into the secret of happiness by HBS professor
Michael Norton and two colleagues from the University of British
Columbia, Elizabeth Dunn and Lara Aknin. Their article, "Spending
Money on Others Promotes Happiness," appeared in the March 21, 2008
issue of Science.

"Intentional activities—practices in which people actively and
effortfully choose to engage—may represent a promising route to
lasting happiness. Supporting this premise, our work demonstrates that
how people choose to spend their money is at least as important as how
much money they make," the researchers explain.

"Our findings suggest that very minor alterations in spending
allocations—as little as $5 in our final study—may be sufficient to
produce non-trivial gains in happiness on a given day."

Norton and colleagues found these results to hold in three different
studies: a nationally representative survey, a field study of windfall
spending, and an exploration in which participants were randomly
assigned to spend money on others rather than themselves.

We asked Norton to elaborate in an email interview, an invitation to
which he cheerfully agreed.

Sarah Jane Gilbert: What prompted you to conduct this research into
the connection between money and happiness?

Michael Norton: One of the most puzzling paradoxes in social science
is that though people spend so much of their time trying to make more
money, having more money doesn't seem to make them that much happier.
My colleagues Liz Dunn and Lara Aknin—both at the University of
British Columbia—and I wondered if the issue was not that money
couldn't buy happiness but that people simply weren't spending it in
the right way to make themselves happier. Liz had the great idea to
explore whether, if we encouraged people to spend money in different
ways, we could uncover the domains in which money might lead to
happiness. We conducted a number of studies—from national surveys to a
field study in which we examined how the manner in which employees at
a Boston-based company spent a profit-sharing bonus impacted their
long-term happiness—in which we showed that money can buy happiness,
when people spend that money prosocially on others (giving gifts to
friends, donating to charities) rather than on themselves (buying
flat-screen televisions).

Q: What are the psychological factors involved when it comes to
individuals and feelings they encounter when giving away their money?
Does it matter how wealthy you are?

A: We found that it was the relative percentage of their money that
people spend on others—rather than the absolute amount—that predicted
their happiness. In the bonus study described above, for example, the
size of the bonus that people received had no impact on their
long-term happiness. It was the percentage of that bonus they spent on
others that increased their well-being. In another study, we showed
that spending as little as $5 over the course of a day on another
person led to demonstrable increases in happiness. In other words,
people needn't be wealthy and donate hundreds of thousands of dollars
to charity to experience the benefits of prosocial spending; small
changes—a few dollars reallocated from oneself to another—can make a
difference.

Q: So many of us equate having money with happiness. How does this
relate to your findings that showed giving it to others is what
promotes happiness?

A: Although a large body of research does show that people become
happier as they move from being very poor to lower middle class, after
this point the impact of income on happiness is much weaker. Think of
someone who makes $100,000 one year and $110,000 the next—do we really
expect this additional income to suddenly make this person fulfilled,
without a care in the world? (You can also think about whether such
changes in your own income really make you happier with your life on a
day-to-day basis: Being informed about a raise certainly makes us
happy, but the $10,000 doesn't make our siblings or in-laws any less
difficult to deal with over the course of the following year. …)
Although people believe that having money leads to happiness, our
research suggests that this is only the case if at least some of that
money is given to others.

Q: If we were aware that giving equates to happiness, would we be more
likely to spend money on others instead of on ourselves?

A: We were actually most worried about the opposite problem, whether
knowing about the effect of prosocial spending might erase it, if
people engaged in prosocial spending in a calculated manner in order
to "get happy." We conducted a survey in conjunction with the New York
Times "TierneyLab" in which readers who had just learned about our
findings were invited to complete a brief survey in which they
reported their happiness, as well as how much money they had spent on
others and on themselves so far that day. Consistent with our previous
research, we found that spending more on others was associated with
greater happiness among this sample of approximately 1,000 New York
Times readers, even though the respondents had been exposed to our
previous findings.

Q: What are you working on next?

A: We are now actively looking to work with more companies that are
willing to be creative with how they encourage their employees to
spend their bonuses, and companies that are willing to be creative in
how they engage in charitable giving. For instance, many companies
donate a lump sum to charities each year. Our research suggests that
companies might think about splitting that money up among their
employees and empowering them to choose the recipient of those
donations. We refer to such initiatives as creating a "prosocial
workplace," which we believe has benefits both for companies, in the
form of happier employees, and for society, through increases in
charitable giving.

posted by Kermit Pattison

In recent years, corporations have turned to open innovation to solve their toughest research problems and reduce runaway costs of R&D. Now non-profits are beginning to see prize-based innovation as a strategy for humanitarian causes too, such as developing medicines to fight tuberculosis in the developing world, cleaning up oil spills or designing solar technologies for villages in rural India and Africa.

InnoCentive is the premier open innovation marketplace in the world, where corporations and non-profits post their toughest research problems and a global network of 160,000 solvers takes a crack at solving them for cash rewards. Non-profit challenges have grown to about 20 percent of the InnoCentive portfolio, up from virtually none only two years ago. In this Q&A, InnoCentive president and CEO Dwayne Spradlin explains why crowdsourcing is becoming a powerful tool for doing good.

--Is InnoCentive doing more in the non-profit space?

We’re doing more in the non-profit space than ever. We’ve all come here to change the world and you do that by helping organizations of all types really address their challenges. It’s particularly rewarding to work in a challenge realm that can impact human life like people’s ability to drink clean water in sub-Saharan Africa. We’re keenly interested in developing the non-profit sector. I think the data overwhelmingly supports this as an extremely powerful tool that foundations and philanthropies can use.

--People often talk about crowdsourcing as a way to tap technical expertise around the world. Is there also an untapped pool of altruism?

That’s absolutely the case. For our solver community, oftentimes this is the vehicle by which they’re able to contribute. They may not have the financial resources, but they may have the know-how to solve problems that no one else can. That gives them great satisfaction.

I’ll give you a wonderful example. We ran a challenge for the Oil Spill Recovery Institute out of Cordova, Alaska. They needed to find a new and novel way to get oil of the bottom of Prince William Sound from the Exxon Valdez spill. For 15 years, that oil has been sitting down there at the bottom of the ocean. They could get the oil off the bottom and onto the barges, but the surface temperature drops so dramatically that the oil almost solidifies and they can’t pump it through the barge system.

The solver ended up being an engineer out of the Midwest and he recognized a way to solve that problem using technology that’s fairly common in the construction industry. He recognized that was very similar to the problem of keeping cement liquid when you’re pouring a foundation. They used commercial-grade vibrating equipment on the barges to keep the oil fluid enough so they could process it through the system.

Anyway, the moral of the story is he won $20,000 for solving the challenge and he spent part of that money to fly himself to Cordova, Alaska because he wanted to meet the people from the foundation he was most directly associated with helping. He’s now made himself available to do work for them pro bono on future projects. There’s very little likelihood he would have had an opportunity to use his skills and resources in this philanthropic way without InnoCentive.

--How is a non-profit challenge different than a commercial one?

Certainly in the commercial space, we’re not able to be as open. Commercial entities oftentimes are running challenges anonymously. They’re very careful not to identify themselves for fears that they’ll tip their hands on business strategies. But in the not for profit space, the rules change entirely. It’s much more about openness. It’s much more about trying to drive collaboration and almost a planetary learning to drive something that ultimately benefits humankind in general.

The way we handle intellectual property between the two models is vastly different. In the commercial space, we’re typically transferring intellectual property and trade secrets. In the not-for-profit space, it really is much more about an open source form of licensing and putting into the public domain the learning and outcomes of the challenges.

--Does that make it easier to generate solutions in philanthropic efforts?

It definitely can be. We know our global solver community works on challenges for three reasons. First, they want to work on problems that matter. Second, they want to be part of an elite group of problem solvers that are making a difference. And third, it’s because of the money. Not-for-profit challenges, where there’s clearly some sort of a global good associated with it, tend to draw the attention of globally-minded solvers. That means that a $10,000 or $20,000 prize—which could be quite a bit for a not-for-profit to offer—is amplified dramatically because the dividends to the solver are not only the money but also for the

--When you post a challenge, how often are they actually solved?

We solve about 40 percent of challenges on network. But what’s interesting here, particularly when you’re looking through the philanthropic lens, is we solve well in excess of 40 percent of not-for-profit problems. It’s closer to 60 percent.

There are two reasons for this. The first reason is there is a fundamental desire for people to work on problems that are important to the global good. We get tremendous participation for these kinds of challenges on our network, which drives higher solve rates. The second reason—and I think it’s equally important—is the not-for-profits in general have not had access to the same kinds of innovation, research and development tools as commercial enterprises. With InnoCentive and prized-based innovation, these organizations can access to the same kinds of brilliant people around the world on demand that companies have for years.

Many of them are without question cutting edge innovations. But many of them are problems that have probably been solved before, and no one has recognized the easy applicability of an existing solution to that foundation’s or philanthropy’s problems. In the case of the Oil Spill Recovery Institute, that was not brand new science, that was an innovative application of existing technologies. You have to ask yourself: if they went 15 years without solving that problem, was it because they were just looking in the wrong place? I think for a lot of the organizations that’s the case.

--Oftentimes people in specific fields tend to descend into groupthink. When you flip a challenge to the outside world, do outsiders see things that people in the silo don’t see?

Innovation often happens at the boundary. The way we’ve structured innovation the last 100 years is probably insufficient to meet the world’s challenges the next 100 years. We’ve tended to build large, monolithic views of the world—if you want to solve a problem in chemistry, you hire a PhD from Stanford in chemistry. If that problem isn’t solved by that PhD or his cohort of 99 other PhDs from Stanford in chemistry, then it must be an unsolvable problem.

For the last 100 years, organizations have focused on building labs full of the smartest people in the world in a particular area. But after a certain amount of time, that silo effect envelops the organization and keeps the organization from fresh and entirely new perspectives on how to solve these kinds of problems. This prize-based model helps an organization to not only maintain that large internal organization of the best people in the world, but to augment it with up to 7 billion of the other smartest people in the world.

--Can you give us an example?

We do work with an organization called Prize4Life, which is focused on ALS, also known as Lou Gehrig’s disease. They wanted to find a biomarker to help identify and treat Lou Gehrig’s disease patients. They decided to run the challenge in multiple phases. The first phase was a prize to anyone on earth who can come up with a new and novel way of identifying where a promising biomarker might be.

What’s amazing about this was that solutions were coming from not necessarily from the medical field. The solutions were coming in from people they had never heard of before—computer scientists, experts in bio informatics who were suggesting algorithmic approaches, machine manufacturers who knew enough about the disease to say the following kind of approach might provide a highly predictive model of who might be susceptible to this disease. They were getting solutions from outside the establishment that ended up generating some of the most innovative thinking in that field in recent years.

They ended up paying out five winners, even though their initial intent was to pay out only one, because the solutions were so much more intriguing than anything they had seen. It’s the stuff happening on the boundary, outside the silo, that actually drives innovation.

--InnoCentive has been operating eight years. What has this whole experience shown the world about how you generate ideas?

Whether it’s for a commercial entity or a non profit entity, the business of business is innovation. We all need to move our agendas, we all need to take new products to market, and we all need to find innovative ways to improve the lives of people everywhere. One of the most exciting things to happen in the last decade has been the emergence of the Internet, connected systems, social networking—all the tools to allow hundreds, thousands or millions of people to work on problems that matter. We’re clearly proving the ability of this model to do more, faster and better than existing innovation models.

Remember, in this prize-based world, companies are paying predominantly for success. Most innovation efforts fail. With the monolithic view of R&D and innovation, one of the main reasons it’s insufficient is that you’re paying for failure. In this model, you’re paying only for the winning solutions.

--How are you continuing to build a better mousetrap when it comes to prize-based philanthropy?

Imagine challenges to which people can vote and contribute with their donations—prize amounts that grow in relation to public interest. This approach could focus millions of dollars and an extraordinary amount of attention in a way that merges free market activist philanthropy with the power of prizes. Perhaps 100,000 people could speak with their hearts, minds, and wallets to bring a challenge related to climate change into the forefront more easily than industry or government. We call the idea "crowd-funding meets crowd-sourcing" and could represent the truest form of democratic engagement in the process of innovation. This is an idea we are spending a lot of time developing and would welcome any thoughts and reactions from your readers.

--Do you see more interest in philanthropic or non-profit challenges during holiday season?

We do know that many of our solvers take time during the holidays to work on challenges and we’re particularly hopeful this year due to increasing number of philanthropic challenges on InnoCentive.com website. Again, many people are doing this for more than the money, they are doing it to make a difference. As true as ever this time of year.